The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 10.03.2021
The markets are beginning to show a correction happening, which means that the momentum is changing. Bitcoin’s inability to break above the $56,000 showed the weakness in the Bull momentum and gave Bears enough room to stage a move to the downside. EURUSD continues to move in a downward fashion as the focus shifts for the U.S. CPI.
The bullish momentum that Bitcoin has displayed over the last couple of days managed to break through several important resistance levels, most importantly was the $52,000, which allowed the instrument to continue moving higher, after breaking above the aforementioned level, BTC set its eyes on the $55,000 level, as breaking above it would be a big win for the Bulls.
Technically speaking the instrument did manage to break higher and even reached towards the $56,000, however, the presence of sellers and lack of momentum pushed the instrument back down below the $54,000.
The negative pressure on EURUSD that we talked about yesterday seems to have abated a bit as the instrument managed to rise towards the 1.1900 but quickly fell back. The overall bearish pressure continues to play the major role in this particular market as even with the decreasing yields on the U.S Treasuries.
But, the EURUSD still doesn’t seem able to proceed upwards by a few points. Both the RSI (Relative Strength Index) and the MACD (Moving Average Convergence Divergence) reveal equivalent negative pressure continuing to mount.
Gold’s movement higher was interrupted by the combination of the $1,720 resistance level and the presence of the 50-SMA (Simple Moving Average) as a moving resistance, the mentioned SMA kept a lid of any further upside movement that the instrument might have had, and started to push it lower. The RSI and MACD on this instrument show some positive momentum brewing with the RSI printing above the 50 level and had neared the 60, indicating that there’s some bullishness going on.
What’s the strategy you’re going to use when it comes to trading these markets? Markets are correcting, again, but will this one stick and prove to be a decent correction, or will it be another bump in the negative area?
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Bitcoin Corrects from $56,000
We had explained in yesterday’s brief that the Bitcoin still had enough momentum to keep on increasing, however, as the instrument reached the $55,000 level, the momentum seemed to dry up. The instrument continued to move above the $55,000 albeit with decreasing momentum as it reached the $56,000 before it couldn’t move any higher. The result revealed an extensieve move to the downside as BTC trades below $54,000.
However, this movement was sort of expected since the RSI on the 4-hour chart had reached above the 70-level indicating that the instrument had entered overbought conditions. The MACD was also showing the decrease in bullish momentum as the histogram began to correct lower even before the instrument hit $55,000. The focus of the Bulls at this point is to keep things steady as they find the needed momentum to try and break above the $56,000 level.
If the Bulls are unable to keep the bullish momentum alive, the Bears will more than likely sink their teeth into the instrument. If Bitcoin continues to move downwards, the support zone located between the $52,800 and $52,500 will most likely keep losses in check. Furthermore, at any break lower, the main level of $52,000 will come into play further down. And, the $51,200 will be the level that Bears will look at with the ultimate goal seen at $50,000.
Current Market Sentiment: Cautious.
EURUSD Drops Amid USD Rebound
The movement higher that we observed on the EURUSD was hindered by the 1.1900 resistance level which kept any gains in check, after repeated failures to break above the mentioned level, EURUSD found itself on the backfoot once again with Bears targeting the 1.1850. This move lower comes on the back of a rebound in the USD as Treasury yields managed to stop their decline from the 13-month high and are currently consolidating at their current levels.
Moreover, the risk-off mood continues to batter the common currency. Markets remain cautious and seem unwilling to put any bets on the instrument as the U.S. Consumer Price Index (CPI) is going to be released today alongside the voting that’s going to happen on a $1.9 trillion stimulus package by the U.S House of Representatives. Not to mention the European Central Bank (ECB) monetary policy decision which is scheduled for tomorrow.
Sentiment in the EURUSD markets proceeds to be dominated by the U.S. Treasury market. The EUR-side of the equation shrugged off the downward reversion of the Eurozone GDP for the 4th quarter, and the upbeat German data. Nevertheless, the focus of today will be whether or not the EURUSD will continue to move lower towards the 1.1850 should the risk-aversion in the markets continue to expand.
Current Market Sentiment: Bearish.
Gold Remains Above $1,700
After gold’s run-up towards the $1,720, the instrument found immense resistance in the form of the 50-SMA which caused the instrument to pause on the movement higher. But, the main focus for Bulls is to keep the instrument ticking above the $1,713, as a break below that level could undermine all the gains that the instrument made, meaning that the Bulls must break above the 50-SMA, which serves two purposes. The first gives the Bulls enough confidence to allow for further upside, and the second serves to establish a decent foothold.
Today’s focus for gold traders will come in three folds. The first will be the $1.9 trillion stimulus package in the U.S. which the House of Representative will vote on today, the second important impetus on gold will concern the U.S. Treasury yields to see whether or not the risk-aversion will push the market towards the non-yielding yellow metal or towards the Treasuries, and finally the third impetus will be the U.S. CPI data which is bound to cause a scene and definitely have an impact on gold.
By judging the resistance and support structure of the precious metal, we can notice that in order for gold to continue moving higher, it needs to break above the resistance zone located between $1,717 and $1,720. If the instrument manages to do so, the next level that Bulls will target is the $1,725 followed by the $1,735. Thus, the ultimate level which gold needs to break above in order to establish a decent recovery would be at $1,743.
Current Market Sentiment: Cautiously Bullish.
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